California’s emergency rate request decreased to 17 %

The state lawyers at the state farm, the California Ministry of Insurance, and the consumer agent, presented opening arguments in a hearing to determine the fate of the state farm request to increase the prices of homeowners in emergency situations yesterday.

The plenary session was appointed in Auckland, California, before the Administrative Law Judge Karl Friedrich Celgamen was originally appointed to the parties to present arguments for an average rate of 22 %. But last Friday, home owners in California in the state of California and CDI agreed that the number of temporary increase can be reduced to 17 %.

More importantly, this agreement not only reduces the request for an average rate Attention.

In late February, when the executive managers of Farm Farm and representatives of the Consumer Commercial Agency met with the California Insurance Commissioner Ricardo Lara, Lara pressed to obtain some confirmation that the government farm will enter to support the financial state of its affiliated in California, which the executive managers presented as one of the parties – broken at the levels of organizational procedures and supporting negative procedures From progress. He also asked State Farm General to think about stopping other than renewing the previously planned policy, a concession said an executive official that was not likely to be at that time even though he agreed that a commitment to not renewing any other customers was a possibility.

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This last commitment is in the agreement documented by CDI and State Farm General in late last week. In addition, the parties state and approved by the applicant [State Farm General] It is not permissible to start any program (groups) not a new renewal in the lines represented by the requests until the end of the year 2025, “says the modified condition document on April 4.

On March 14, Lara temporarily agreed to the State Farm request to temporarily increase an emergency rate by 22 %, only if the company can justify it with data in the plenary session scheduled to start yesterday. At that time, State Farm called for a non -renewal and follow -up of $ 500 million in capital pumping from its mother company to restore financial stability.

The first hours of the ALJ, open to the public and available for display via Livestream, have been allocated for procedural issues including whether the honor of 17 % has been provided on time, and whether the CDI actuary expert can witness on behalf of a plenary session anyway.

“The rates of actual risks and costs – not an attempt to restore profits or maintain credit categories, said in a statement.” The Consumer Monitoring Authority works as an intervention in accordance with the provisions of the proposal 103.

During the opening arguments, Catherine and Lenton of the law firm Hogan Luvils, which represents the State of State Farm, indicated that forest fires in January 2025 made the financial state in favor of the state’s general company worse than it was when the company originally increased prices in the past year, with a surplus drop to 600 million dollars compared to 4 billion dollars only before 2015.

Related to: State Farm paid $ 2.5 billion for La Wilfires fires

Nikki McKandi, the assistant chief adviser to the CDI price enforcement office, argued that the commissioner has the right to consider the insurance company’s sheet. She said, “Monitoring consumers claims that the commissioner does not have the authority to do anything but apply his own formulation formula and that the commissioner must refuse the farm request in the state from relief in emergency cases because they did not prove that the company has the right to increase in prices under the formula,” as it provided reasons to provide this idea “without calling.”

She said that the composition of the commissioner’s mice industry “contains an explicit exception as the company is at risk” and that the California Supreme Court has previously recognized the “Commissioner’s Public Authority to take any necessary steps to implement the pillar 103.”

She said: “Approval of emergency request in State Pharm State to obtain a temporary price increased is a very necessary step. It is not a best interest for consumers in California, allowing state Farm General, which is the largest property insurance company in California to a large extent … to withdraw or withdraw from the California market.”

“Nothing in this case is normal. Ordinary rules do not apply. We are on Titanic and see the iceberg. Now it is not the time to argue around where the deck chairs are placed.” “It is time for it to be” around this ship around it, “McKeni said, if we don’t, [then] More than 3 million California residents go to water and there is not enough life boats. “

And Landton has argued that the temporary rate “does not pose any danger to documentary holders because if the final rate ends until it is less than the temporary rate, the documents holders will have the right to recover the difference with interest.”

He didn’t sit well with Plcher’s Consumer Watcher. “The plural scheme, which is more than that, is the opposite of the previous approval of the average that voters in California requires” under the proposal 103. “[Refunds] It is not a voucher, then, to charge illegal prices today to maybe Correct them later. They do not isolate the company or management to legal requirements to determine the future prices based on a full proof session … “

He said: “The recovered amounts also do not reach the damage to now,” referring to the damage to the owner of the house, which is forced to pay what the consumer group counts to be $ 470 in additional installments, on average. The owner of the house is forced to choose between paying a new installment or paying his mortgage.

He said that the recovered amounts, “a family does not help that is not renewed or priced and cannot find alternative coverage. These damages are immediate and in many cases it can be irreversible. Every dollar is imposed under an unjustified rate is a dollar that has been misinterpreted. It is taken from a family trying to keep her home on the table on the table.”

He also presented arguments that the problem of state Farm General is the problems of making it – by maintaining low prices in order to develop its share in the market and pay the increase in insurance from the state of state Farm Mutual with no significant recovery for birth holders until this year. (State Farm said that reinsurance recovery will reduce $ 7.6 billion of direct losses in wild fires to $ 212 million on a net basis.)

Bleachar said that the formula of mice industry in California “is designed to match the price with risk. It is not designed to solve work problems, to manage market fluctuations or capital recovery”, on the pretext that the state farm cannot depend on its financial state to justify the increase in the state under the current laws.

Only one witness witnessed the hearing after the David Appl, the actuary expert who retired from a former position as director and director of economic consulting at Milliman, is currently carrying out the consultative work for State Farm General. In a direct examination, Michael Madijan asked Hughan Luvils from Apple to justify a statement in his declaration that is not different from the argument that Wellington presented – that there is no danger to document holders in granting an increase in the 17 % rate with possible recovery state after the 103rd pillar session.

Abel said, “I do not deny that document holders will pay a higher -term higher allowance, [but] There is a justification that the highest allowance in my opinion is that exposure and risk in California are very important. “

I appreciate the needs of consumers and the burdens that this may put [them]. I am aware of that. But I am also aware of the financial clarity of the state’s largest insurance company, and the fact that insurance prices must be sufficient to cover the basic insurance costs. This was not the case for the Public State farm … during the past decade.

Abel added that it does not mean that he indicates that the financial status of the insurance company “puts it in a modified mold and determines a change in the rate accordingly. But this is something that the commissioner must take into account because the main responsibility of the Commissioner, in my view, guarantees the financial solvency of insurance companies under insurance companies [his] authority.”

The actuary expert said he believed that taking the “renewed financial situation” in the State of State Farm considering “a perfect suitable if the temporary rate that has a dramatic level of protection for document holders is increased.”

He said: “In the absence of an increase in the rate and absent from pumping capital, I think it is similar to the rolling of dice. You do not know what will happen to the public jurisdiction.”

“If you want to risk the state of life that remains viable and remains in the market, I think this is a great danger to taking … The other side of this is to give the temporary increase in the rate, get a note of $ 400 million, and restore some extent in the financial state of the company.

The session will resume at 10 am Pacific time on Wednesday, with Appl interrogating the consumer Watchdog on the agenda.

Once the session ends, the authorized judge will provide a proposed resolution to accept an increase in the temporary rate in accordance with the insurance law (Article 1861.08), according to the order of Lara on March 14 to listen to a temporary increase. The proposed decision is to be connected within 10 days.

Subjects
California