In addition to putting the squash on the carrier’s proposed 5.9 percent statewide rate hike, the commissioner also issued the company with a related order that blocks Allstate from raising premiums without prior approval from the Texas Department of Insurance. State Farm is the only other company under such state supervision of its rates.
The Insurance Commissioner stated he had no other option but to act immediately as Allstate announced Monday that it would promptly increase the cost of its homeowner policies as they came up for renewal.
His orders turning down the rate plan and putting Allstate under state supervision cited the commissioner's authority to make sure that rates charged by insurance companies are reasonable.
"The [Allstate] filings, separately and in combination, contain rates that are excessive, inadequate, unreasonable and unfairly discriminatory for the risks to which they apply," Mr. Geeslin's order stated.
Regarding his decision to directly supervise Allstate's rates, Mr. Geeslin cited the company for "repeatedly" trying to impose excessive rates on its customers over the last three years. The company has 917,000 Texas policyholders.
Allstate officials objected to the action, and said they are considering their response options, including filing a court challenge.
"This doesn't change our position that this is an actuarially justified rate that is competitive," said Bill Mellander, a spokesman for the company.
"We need to be competitive. We have to be competitive, or we won't be a player in the [Texas] marketplace. At the core of everything we do is providing the right product at the right price for our customers."