Let’s give them the Chaney (without vaseline): State Farm files for a 45% rate hike on the coast

I’ll have in depth analysis in another post. Let’s begin with Anita Lee and her front page story in today’s Sun Herald where Mike Chaney the tap dancing politician is long on rhetoric as he prepares coastal policyholders for the shaft:

The focus at State Farm headquarters in Bloomington, Ill., is on the bottom line, not consumers, Mississippi Insurance Commissioner Mike Chaney said after receiving the insurance company’s request for an average 45 percent rate increase on existing business on the Coast.

“The more I’m around these folks, the more I worry about them,” Chaney said Friday. “They don’t have a heart. The corporation as a body has no compassion for the consumer.”

Coast agents were notified of the rate increase request on Friday, when it was filed. The proposed increase would be 46.9 percent south of Interstate 10 and 43.5 percent on the north side.

“While we understand the impact this request may have on some policyholders,” the memo said, “We also recognize our responsibility is to our entire policyholder base. This rate change will provide us the ability to more appropriately balance the risk with ensuring our ability to continue to serve our policyholders along the Gulf Coast and throughout Mississippi.”

State Farm spokesman David Majors pointed out that the insurance commissioner and his department will be requesting more information as the rate filing is reviewed.

“We’re a long way from the results on this,” Majors said.

Chaney said the rate increase could actually be as high as 60 percent, depending on how it is structured in State Farm’s rate filing. Majors could offer no information to confirm or refute that percentage.

Chaney said MID will not grant the full rate increase request.

State Farm’s rate proposal also includes an increased discount for homeowner policies without wind. The discount would go from 80 to 85 percent in the upper three South Mississippi counties and from 70 to 75 percent on the Coast.

MID plans to hold public hearings on the Coast about the proposed rate increase in two to three months, after it has been reviewed by actuaries, professionals who calculate risk. Rate hearings have historically been held in Jackson, but Chaney says he will to bring them to the Coast because the increase is proposed here.

The commissioner said State Farm executives would not include with the rate filing a plan to write new business on the Coast. State Farm stopped writing new business after Hurricane Katrina and also discontinued policy renewals on properties near the Mississippi Sound or waterways that spill into it.

“The problem we run into as regulators is, we say, ‘Well, are you going to open up the Coast and start to write new business?’ They say, ‘No.’ ” Chaney said.

State Farm was previously granted a 6- to 18-percent rate increase in 2008 for Coast homeowner policies that included wind. The company also moved at that time to a mandatory 5 percent hurricane deductible.

The nation’s largest property insurer decided to stop writing policies in Florida after state regulators refused to approve an average 47.1 percent rate hike the company requested. State Farm said the hike was needed to offset a significant increase in mandatory credits given to homeowners who build stronger.