State Farm's rate request on the line
By By William F. West / community editor
Dec. 15, 2002
State Senate Insurance Committee Chairman Dean Kirby says State Farm is in a good position to receive a substantial rate increase on homeowners insurance, if the company can justify it.
State Farm wants a 42.5 percent rate increase citing $50 million in losses last year and $111 million over the past five years in Mississippi.
Last month, the Bloomington, Ill.-based insurance giant stopped writing new homeowner policies in Mississippi. Other companies have gotten rate increases of up to 20 percent, but officials have said State Farm is a special case because it writes about 30 percent of the homeowner insurance business in the state.
State Insurance Commissioner George Dale has set a public hearing for Thursday at 9 a.m. at the Woolfolk State Office Building in Jackson to address State Farm's request.
Kirby said he would like Dale and State Farm to find middle ground on the request, but believes the company will come well prepared to make the case for the rate increase.
Lamar McDonald, an independent insurance executive with Meyer &Rosenbaum in Meridian, said he's not surprised by State Farm's request and can understand the reasons for it.
State Sen. Terry Burton, D-Newton, said the state needs to give State Farm the ability to do business but his constituents also need to have the opportunity to buy insurance.
State Rep. Eric Robinson, R-Quitman, knows full well the hardships of such a potential increase on his constituents because many of them unemployed the results of factory and plant closings in Clarke County.
Robinson, himself a former insurance agent, said he believes there's no way State Farm is going to get such a high rate increase.
He said he believes what the company is probably doing is asking for at least twice what they'll get.
Robinson said the bottom line for him is that he doesn't want big government to have to step in and tell companies what to do and what to charge.