PUBLIC INSURANCE COUNSEL CALLS FOR RATE DECREASES FOR HOMEOWNERS INSURANCE

Press Release
March 09, 2007
For more information call:
Rod Bordelon 
(512) 322-4143

PUBLIC INSURANCE COUNSEL CALLS FOR RATE DECREASES FOR HOMEOWNERS INSURANCE

AUSTIN—Public Insurance Counsel Rod Bordelon applauds Insurance Commissioner Mike Geeslin for ordering new homeowners insurance rate filings. Commissioner Geeslin today ordered companies selling homeowners insurance in Texas to file rates and supporting documentation by June 1, 2007. Bordelon, who as Executive Director for the Office of Public Insurance Counsel, represents the interests of policyholders, has objected to a number of rates filed in recent months and argued for the reduction of rates including the recent rate reduction order upheld in District Court against Allstate. “Due to recent financial filings it is now absolutely clear that homeowners insurance rates in Texas are excessive across the board”, said Bordelon. “I applaud Commissioner Geeslin’s action for taking this first step in ordering new rate filings. I fully expect those filings to justify significant rate decreases. If the carriers refuse to reduce rates on their own, hearings should be held to disapprove their excessive rates.”

Under Texas law, insurers are free to “file and use” rates they deem appropriate subject to review by the Commissioner of Insurance. The Commissioner may disapprove rate filings and may hold hearings to determine whether rates currently charged are excessive or unfairly discriminatory. Rates are set after determining future risk, and past experience is not always an indication of future losses. However, the recent financial filings clearly show a four year trend of loss reductions which cannot be ignored. “Insurance losses have declined significantly in recent years,” said Bordelon, “it’s time these savings are returned to policyholders through reduced premiums.”