Rebecca Mowbray reports State Farm will raise rates for mom-and-pop landlords, drop their wind coverage in today’s Times Picayune:
State Farm Fire and Casualty Co., the state’s largest residential insurer, is asking for an average 9.9 percent rate increase for homeowners coverage in Louisiana.
The filing with the Department of Insurance comes just over a month after Insurance Commissioner Jim Donelon rejected the company’s request for an average 19.1 percent rate hike. Donelon called that proposal unreasonable and unjustified.
State Farm received an average 8.3 percent increase last year in Louisiana after asking for 13.7 percent.
Although the average rate hike would be 9.9 percent, hurricane-vulnerable coastal areas would bear the brunt. The New Orleans region would see a 17.7 percent increase while rates in the Lake Charles region would go up 22.5 percent, said State Farm spokeswoman Brooke Cluse…
Cluse said the proposed rates are based on future loss projections and not past claims experience. She said that although State Farm believed its earlier rate increase request was justified, the company was trying to work with regulators to “move closer to adequate rates.”
What a game! Just how many coastal policyholder contracts for coverage did State Farm honor following Hurricane Katrina? Very few, according to the evidence of the multi-state scheme provided in the Rigsby qui tam complaint. What a waste of public resources to put an agency through the process of reviewing an inflated request just to make one “closer to adequate” appear a better deal! Continue reading “What a “good neighbor” – State Farm sticks another knife in coastal economy!”
Thursday, September 24, 2009
Perdido Key, Florida
LOUISIANA AND FLORIDA-
NIGHT AND DAY ON PROPERTY INSURANCE!
All this week, Florida’s largest newspaper, the Miami Herald, has been writing both feature articles and editorials about the problems facing Florida property owners in finding affordable insurance. Day after day, headlines conveyed the intensity of the struggle: “Storm Warning: Prop up insurance,” was a typical lead, along with “Is Citizens Insurance ready for the big one?” and “Lawmakers still scrambling on wind insurance.” Florida, like all gulf coast states, has problems of both insurance affordability and availability. But here’s the difference between the Sunshine state and the Bayou state. Florida is giving the problem serious attention. It’s a front and center concern for the governor, the legislature, insurance regulators, and the news media. In Louisiana, there is hardly a whisper.
When Florida Governor Charlie Crist took office a few months before Governor Bobby Jindal in 2007, his first words of commitment were: “The lack of available and affordable property insurance is the biggest threat to our economy. We cannot wait until the regular legislative session to find solutions.” Crisp immediately called a special session of the legislature and offered a litany of changes and reforms that led to cheaper insurance rates.”
Florida has significantly more hurricane exposure than does Louisiana. Ninety percent of all homeowners live within a few miles of the Gulf or the Atlantic Ocean. A hurricane crossing the Florida peninsula slows down, at best, only 15 miles per hour. Yet in spite of all this exposure, property insurance rates are cheaper in Florida than in Louisiana. In Perdido Key, on the Florida-Alabama border, many Louisianans have beach homes or condos. On average, they pay significantly less on these properties than they do on their homes in New Orleans, Baton Rouge and other Louisiana cities. Property insurance rates for commercial real estate have gone down, somewhere in the neighborhood of 30% to 40%, according realtor Steve Ekovich of the Tampa office of Marcus & Millichap, and insurance is more available. Continue reading “Jim Brown Compares Florida”
So I was anonymously sent this video that sets the record straight. Mr Donelon, I stand corrected.
Thursday, August 6, 2009
Baton Rouge, Louisiana
INSURANCE DYSFUNCTION CONTINUES
Press reports, both nationally and at home, have confirmed what financial analysists and investigators have known for months. Louisiana continues to have the most dysfunctional insurance system and the worst insurance climate in the country. In almost every category, insurance rates are the highest nationwide. And just last week, the New York Times published a front page investigative report on major financial trouble involving Louisiana’s largest insurance company.
The American Insurance group (A.I.G.) does more insurance related business in Louisiana than any other company. A.I.G. recently received the largest bailout in history. Yet serious questions are being raised about insider swapping of both assets and liabilities among numerous A.I.G. subsidiaries. The Times article says A.I.G. is selling way too much insurance. “State insurance commissioners are supposed to keep insurers from writing new policies if in doubt that they can cover their claims,” the article concludes.
One of the voices raising alarms is former Louisiana chief insurance examiner W.O. Myrick. He was quoted extensively in the Times article, and has looked at a number of A.I.G. subsidiaries that do extensive business in Louisiana. W.O. was of great help in my initial days of taking over a deeply troubled department back in 1991. He assisted me in shutting down some 50 insolvent insurance companies. So he knows the territory, and when he says there is potential trouble, you can bet on it.
Remember now that we are talking not only about Louisiana’s largest company, but one that so far has received over $210 billion in federal bailout funds. That’s a lot of dough in anyone’s book. How much? Figure that $700 for you and each member of your family goes from the tax till to A.I.G. And since the government has to borrow the money, add in 10% for the next 30 years. We ain’t talkin’ chump change here. Continue reading “Jim Brown Joins Slabbed in Calling Out AIG: You’re Insolvent and We Know It”
Jim was kind enough to email me his latest column, which is simply excellent. Here in Mississippi the talk is putting even more taxpayer money into the wind pool. In both cases we note Republican administrations have well honed their new found skills practicing socialism. – sop
Thursday, January 8th, 2008
Baton Rouge, Louisiana
LOUISIANA TAXPAYERS ARE THE LOSERS IN PROPERTY INSURANCE SCHEME
In days of old, Robin Hood took from the rich and gave to the poor. When it comes to insurance, the Louisiana Legislature and the Insurance Department do just the reverse. They apparently think it is better to take from every taxpayer, rich and poor alike, and give away public funds only to homeowners, who are more likely to be a little better off. If you don’t own a home, either by choice or because you cannot afford to, your tax dollars are taken out of the state general fund to be given away as a gift to those fortunate enough to be a homeowner. It’s Robin Hood sticking it to the little guy.
The Louisiana insurance Department is ballyhooing the giveaway program as homeowners getting part of their insurance premiums back. Headlines in several of the state daily newspapers bought in to the Department press release by stating that “Homeowners may get rebate on Insurance.” But this was a misleading fiction, since there was no rebate involved. Homeowners were not getting a rebate on what they had paid for insurance. What they were getting was a handout of state general funds from the legislature. Great if you qualify for the handout. But it’s a giveaway for only a certain class of people, and completely inconsistent with the prudent expenditure of taxpayers’ dollars. Continue reading “Jim Brown on Socialism and Insurance, Louisiana Style”
Jim was kind enough to share this week’s column with us including fresh rumors from the Louisiana Department of Insurance that explains why they did not cooperate with the investigation that lead to the indictment of Citizens former CEO Terry Lisotta. – sop
Thursday, December 11th, 2008
Baton Rouge, Louisiana
LOUISIANA CITIZENS INSURANCE SCANDALS CONTINUE TO GROW
A year ago, it would have been hard to imagine that conditions at Citizens Property Insurance Company could get any worse. The state created and state run company was in debt by over $1 billion. The Rouge Business Report called Citizens the biggest financial disaster in the state’s history. But never underestimate the ability of some state agencies to make a dysfunctional situation go from bad to worse. The Board governing Citizens, that includes statewide elected officials, has shown little oversight of the Companies’ spending and management decisions, sparking not only criticism from the Legislative Auditor in Louisiana, but also provoking major investigations by both state and federal law-enforcement agencies.
The latest Citizens scandal boiled over last week when the former CEO was indicted with 14 counts of theft by fraud, filled with allegations that he spent more than $285,000 on questionable expenses including airline tickets, meals, retirement gifts and stays at lavish hotels. But his attorney said last week that his client is being singled out and “used as a scapegoat” in the poor management of the insurance company. Sources close to the investigation seemed to agree, saying that the latest indictments are just “the tip of the iceberg.”
The whole controversy has significantly elevated due to the resistance of Louisiana’s Insurance Commissioner to turning over some 2000 e-mails requested by the Legislative Auditor’s office. Continue reading “Jim Brown on Louisiana Citizen”