California Insurance Commissioner Dave Jones Sunday welcomed a ruling by a San Diego Superior Court judge requiring State Farm to reduce homeowner and renter rates.
The insurance company had filed an emergency request to Judge Katherine Bacal to reverse an order by Jones in November that required State Farm to reduce rates by $84 million or seven percent over the next year.
The decision, partially denying the request for a stay, means State Farm must decrease its rates, pursuant to Commissioner Jones’ order.
“I am very pleased that the court denied State Farm’s attempt to overturn my order requiring State Farm to reduce its rates going forward,” Jones said. “I look forward to having my team work with the court to craft an order that requires State Farm fully identify the rate payers so that State Farm is actually able to issue rebates, totaling $110 million when this case is concluded.”
State Farm’s lawsuit is an attempt to weaken consumer protections provided by Proposition 103 while simultaneously continuing to overcharge consumers. Policyholders should not be forced to pay excessive rates or be denied the $110 million rebate to which they are entitled, according to Jones.
“I am confident that we will convince the court that excessive rates are unlawful under Proposition 103 and State Farm consumers are entitled to rebates totaling more than $110 million,” Jones said. “The court’s ruling is an important win for all consumers, it is also an important affirmation of my authority under Proposition 103 to protect consumers from excessive rates.”
Officials at State Farm saw the court developments differently than the insurance commissioner.
“We are pleased with the court’s decision to grant State Farm a stay for the ordered refund. We will take steps necessary to comply with the mandated rate reduction while we consider our options, which could include appealing this decision,” the company said in a statement to City News Service. “We maintain that we do not believe the commissioner’s decision is lawful, and will continue taking the necessary legal steps to challenge the mandated rate reduction and rate refund.”
The company’s statement continued.
“Making sure State Farm’s homeowners insurance rates are appropriate for the risks insured is critical to State Farm’s ability to deliver on our promise to customers, that we will be there when they need us most.”
The commissioner’s rate-order went into effect Dec. 13, 2016.
— City News Service