This week, a Texas state judge issued a temporary court order barring the Texas Department of Insurance from posting documents relating to State Farm’s two recent rate increases for homeowners insurance.
State District Judge Stephen Yelenosky granted State Farm’s requested injunction in part because the court felt posting these items would harm the company’s competitive situation in Texas.
Most of the information in dispute related to State Farm contracts for reinsurance, purchased by insurers to help cover unusually large property losses stemming from catastrophic events such as hurricanes.
State attorneys, representing the insurance department, argued that the information already is part of State Farm’s rate filings and should be made public.
TDIC has said its posting of the information was in part a response to the company’s decision to implement two premium increases so close together – less than eight months apart, totalling about 13%, with some homeowners facing even larger increases.
The commissioner had asked the company to withdraw the second rate filing, saying it was “not in the best interests of Texas consumers” and also might create instability in the home insurance market. But State Farm rejected the request and plans to move ahead with the increase.
The insurance department and State Farm also are battling in a long-running case that began when the commissioner ordered State Farm to reduce its homeowners rates in 2003. State Farm refused and the two sides have been in court on and off since then, with hundreds of millions of dollars in overcharges at issue.
State Farm contends that its rates are fair and competitive, and that it owes no refunds to its policyholders.
SMS Legal