Jackson Free Press

Mississippi Insurance Commissioner Mike Chaney said he will refuse to grant a 44.4 percent rate- hike requested by Allstate Property and Casualty Insurance on Mississippi homeowner insurance customers. Chaney said that the Mississippi Insurance Department's actuarial analysis found the 44.4 percent rate increase to be unsubstantiated.

"They're asking for 44.4 percent, and I'm not going to give it to them," Chaney said Friday. "I've already done an actuarial analysis on Allstate's 44.4 percent increase, and I don't find it feasible."

The insurance company has requested an increase two times since last fall. The company decided in January to pull its October request for a 65 percent rate increase on about 50,000 Mississippi homeowners, soon after Chaney vehemently denied their request. At the time, the company argued that it needed the rate increase to counter a sharp rise in claims stemming from fires, burglaries, water damage and other liabilities. Chaney told the Associated Press in January that an actuarial analysis failed to validate the 65-percent rate increase.

Allstate company spokeswoman Allison Hatcher said at the time of the January decision to holster the hike request that the company had not completely surrendered its desire for a rate increase, and would continue to work with Chaney in hammering out a deal. The 44 percent increase requested this month appears to be a small surrender, but Chaney said it is still too high for state residents to tolerate, especially in the wake of a slumping economy.

"A rate increase of this magnitude is a terrible idea right now," Chaney said. "Mississippians can barely afford their bills as it is, and I'm not going to agree to this."

Hatcher told the Jackson Free Press that the company was facing increased costs.

"We're continuing to see an increase in the number of claims and the costs associated with paying claims throughout the state," Hatcher said. "There continues to be an increase in the number of non-model catastrophes—home fires, home burglaries, water damage and liability claims—in Mississippi."

Chaney warned that State Farm customers are already facing the possibility of another statewide rate increase on homeowner insurance policies of 4.9 percent. This increase would be on top of a 19.5 percent State Farm increase the commissioner's office already agreed to last year for the coastal counties of Harrison, Hancock and Jackson. The company had originally requested a rate increase of 45 percent or those counties.

"They filed for much greater than (19 percent) in Alabama and Louisiana, but we've been able to work with (the companies)," Chaney said.

State Farm spokesman David Majors declined to comment.

Regarding the company's recent 4.9-percent rate increase, Chaney said State Farm's non-catastrophic losses "are not that great," and that he believed the company was "living within their justified means."

The commissioner said his department is putting the 4.9-percent rate increase request under actuarial review. He told reporters that he would not likely grant increases before the hurricane season ends in November.

Sen. David Baria, D-Bay St. Louis, said any rate increase is badly timed, considering the economy and the financial devastation arising from the April 22 oil spill.

"I've lost track of insurance issues because we're fighting every day down here with this oil spill," Baria said.

"You'd think if companies like State Farm and Allstate were really good neighbors, they would pull their request for rate increases, especially now while Gulf Coast residents fight to stay in business. I'm surprised they're still pushing for it, considering the timing."

Baria said coastal residents are already dealing with expensive insurance due to Hurricane Katrina devastation. State Farm refused to write any new homeowner policies in three state coastal counties after Katrina, cutting down competition in a market that Baria said already offers little rivalry.

Many homeowners would not be able to afford insurance at all without credits offered through the state's wind-pool coverage, Baria added. He said legislators had worked for years to push the private insurance industry to offer credits to eligible policyholders who invest in damage-resistant homes sporting new post-Katrina building codes. But he complained that legislators in the Senate routinely killed the proposals in committee.