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Below is a chart of Consumer Watchdog's pending and completed challenges to insurance companies' proposed rate changes in California.

Pending

PENDING

Company/Group

Line

Description

Safeco

Homeowners'

Safeco is seeking a 6.9% rate increase to its homeowners' line.  This is in addition to a 4.1% increase granted in July 2009 over the objection of Consumer Watchdog. Safeco violated several sections of the regulations in its rate application, including using improper data, using improper standardized values, using faulty methodologies, and failing to provide data and calculations required by the regulations. Potential savings of over $13 million annually.

Mercury

Auto

Mercury has requested increases ranging from 1.5% to 2.1% for three separate auto insurance programs. Mercury uses insufficient and improper historical data and improper rate of return and yield values for calculating its rate indication. In addition, Mercury seeks improper and unsupported variances to the standard ratemaking formula. Consumer Watchdog has asked the Commissioner to order a rate decrease. Potential savings of over $100 million annually.

Allstate

Auto

The applicant is seeking a second approval of an illegal program called “Your Choice Auto” (“YCA”). The YCA program violates Proposition 103 because, among other things, it violates the Good Driver Discount statute and has unfairly discriminatory premiums. Consumer Watchdog has asked the Commissioner to prohibit use of this program that illegally discriminates against drivers. Potential savings of over $46 million annually.

Farmers

Auto

The applicant is seeking a rate decrease of 5.8% and approval of its automobile class plan.  The applicant used faulty and improper historical data to calculate rates, failed to provide data and information required by the regulations, and requested unsupported and excessive variances to the standardized rate calculation formula.  In addition, the applicant improperly limits the availability of the Good Driver Discount to certain immigrants who are not from Canada.  Consumer Watchdog has asked the Commissioner to order a rate decrease larger than that requested, provide a complete and accurate application, and correct the improper application of the Good Driver Discount.  Potential savings of over $100 million annually.

Liberty Mutual

 

Auto

Liberty Mutual has requested increases ranging from 3.24% to 5.33% for four separate auto insurance programs and approval of its automobile class plan.  Liberty Mutual violated several sections of the regulations in filing its application, including using faulty methodologies and data in calculating its rate, failing to calculate each program’s rate separately, using an improper profit factor, and seeking an improper variance to the standardized rate calculation formula.  In addition, the applicant improperly requires married persons to live together to receive marital status discounts, puts additional, impractical requirements on immigrant drivers to obtain the Good Driver Discount, and improperly increases the miles driven for drivers upon renewal.  Consumer Watchdog has requested that the Commissioner order a rate decrease for all programs and order Liberty Mutual to revise its underwriting and rating rules to bring them into compliance with all laws.  Potential savings of over $24 million annually.

Mercury

Homeowners’

Mercury is seeking a rate increase of 3.9%, which equals nearly $8 million in premium annually.  Mercury filed an incomplete rate application, including failure to provide historical loss data necessary to calculate the appropriate rate indication.  Consumer Watchdog has asked the Commissioner to order Mercury to file a complete rate application and take further corrective action, if necessary.

American Casualty of Reading, Pennsylvania

Healthcare Providers

The applicant is seeking a rate increase of 5% or 10.10% for medical malpractice insurance for nurses.  The applicant used faulty and improper historical data to calculate rates and failed to provide data required by the regulations.  Consumer Watchdog has asked the Commissioner to require the company to file a proper and complete application and take other corrective action as necessary.  The potential savings is unknown as the Commissioner has ordered the applicant to expand the scope of its filing.

GEICO

Auto

GEICO has requested rate changes ranging from
-2.6% to +9.46% for three separate auto insurance programs.  GEICO violated several sections of the regulations in filing its application, including using faulty methodologies for calculating its rate and seeking two improper variances to the standardized rate calculation formula.  Consumer Watchdog has requested that the Commissioner order a rate decrease for all programs.  Potential savings of tens of millions of dollars annually.

Hartford

Auto

Hartford is seeking a rate increase of 6.89% to its personal  
lines automobile insurance.  Hartford failed to provide the incurred loss trend values and failed to provide its case reserves, as required by the regulation. Consumer Watchdog’s has requested that the Commissioner reject the requested increase, order a rate consistent with proper actuarial analysis and the applicable regulations, and take such further corrective action as deemed necessary.

COMPLETED

Company/Group

Line

Date

Notes

American Modern Home Insurance Company

Homeowners’

December 2009

The applicant sought a rate increase of 28.68% to its mobile home coverage.  The historical data used by the applicant to calculate its rates was obviously distorted.  Consumer Watchdog asked the Commissioner to require the company to file correct data and take other corrective action as necessary.  Potential savings of over $2 million annually.  UPDATE: On December 21, 2009, American Modern Home agreed to a reduced rate increase of 9.5%, saving policyholders $2.1 million annually.

Allied

Homeowners’

November 2009

Allied sought a rate increase of 6.9%.  The Commissioner ordered a rate increase of 4.8%, saving policyholders over $4.8 million.

Oregon Mutual

Earthquake

October 2009

Oregon Mutual sought a rate increase of 50.6%. After Consumer Watchdog filed a Petition for Hearing, Oregon Mutual withdrew their application, saving policyholders over $660,000 in earthquake premiums each year.

Mid-Century

Auto

August 2009

Mid-Century sought a rate increase of 1.5%.  The Commissioner ordered a rate change of 0.0%, saving policyholders over $12.4 million annually.  In addition, Mercury changed its Good Driver Discount policy to correct a discriminatory policy identified by Consumer Watchdog.

Progressive

Auto

August 2009

Progressive sought a rate increase of 6.49%.  The Commissioner ordered a rate increase of 4.7%, saving policyholders over $7 million per year.

Allstate

Auto

August 2009

Allstate sought a rate increase of 6.9%.  The Commissioner approved a rate increase of 4.5%, saving consumers $34.6 million per year.

Nationwide

Homeowners

June 2009

Nationwide sought a rate increase of 20.07%.  The application was withdrawn after Consumer Watchdog filed a Petition for Hearing, saving consumers $1.7 million per year.

State Farm

Auto

May 2009

State Farm requested a -3.2% rate decrease. The Commissioner ordered a rate change of -8.0%, saving policyholders over $131.4 million in auto insurance premiums each year.

Hartford

Auto

May 2009

Hartford sought a rate decrease of 0.4%.  Consumer Watchdog wrote a letter to the Department of Insurance identifying potential violations of the Insurance code and/or the Commissioner’s regulations, which caused the rate to be excessive and unfairly discriminatory.  The Commissioner ordered a rate decrease of 6.6%, saving policyholders $828,882 per year.

Safeco

Homeowners

April 2009

Safeco sought a 6.9% rate increase. The Commissioner approved a rate increase of 4.1%, saving consumers over $4.6 million per year.

21st Century

Auto

April 2009

21st Century sought rate increases of 6.9%, 5.27%, 3.06% and 2.64% to various auto insurance programs.  The Commissioner ordered substantially lower rates of 1.29%, -3.0%, -4.7%, and
-9.33%, saving consumers $95 million per year.

Topa

Auto

February 2009

Topa requested a rate increase of 9.26%. The Commissioner ordered a rate increase of 6.9%, saving consumers $259,000 in auto insurance premiums each year.

Auto Club

Auto

February 2009

Auto Club sought a rate decrease of 2.11%. The Commissioner approved a decrease of 5.4%, saving consumers over $61.6 million per year.

Fireman’s Fund

Earthquake

January 2009

Fireman’s Fund sought a rate increase of 24.7%. After an evidentiary hearing, the Commissioner ordered a rate increase of 15.28%, saving consumers annually.

Lincoln

Auto

December 2008

Lincoln sought a rate increase of 12.6%.  Consumer Watchdog wrote a letter to the Department of Insurance identifying issues of noncompliance and missing data.  The Commissioner ordered a rate decrease of 6.9%, saving consumers $792,000 per year.

GeoVera

Earthquake

December 2008

GeoVera sought a rate increase of 20.3% and two additional variance requests. As part of a stipulation with Consumer Watchdog, the application was withdrawn, saving customers over $18.2 million per year in earthquake premiums.

Explorer

Auto

November 2008

Explorer requested a rate increase of 17.6% in 2007. After an evidentiary hearing, the Commissioner ordered a rate decrease of 15%, saving consumers $8.3 million per year.

Farmers

Homeowners

November 2008

Farmers sought a rate increase of 6.9% and four separate variances to the standard ratemaking formula. The Commissioner ordered a rate increase of 4.1% and granted only two of the variance requests, saving customers over $24.2 million in homeowners’ premiums per year.

GeoVera

Earthquake

November 2008

GeoVera sought a rate increase of 6.8%. After an evidentiary hearing, the Commissioner ordered a 0.0% rate change, saving consumers $6.4 million in earthquake insurance premiums annually.

Allstate

Auto

September 2008

Allstate sought a rate increase of 6.9%. After Consumer Watchdog filed a Petition for Hearing, the application was withdrawn, saving consumers nearly $104 million per year.

Allstate

Homeowners

July 2008

Allstate sought a rate increase of 12.2%. After an evidentiary hearing, the Commissioner ordered a 28.5% decrease, saving consumers $250 million annually.

Fireman’s Fund

Homeowners

June 2008

Fireman’s Fund sought a rate decrease of 7.7% to their “Prestige Home Standard” program and a decrease of 14.4% to their “Prestige Home Platinum” program.  Pursuant to a settlement of the parties, the Commissioner approved a rate decrease of 17.9%, saving consumers $24.2 million per year.

Allstate

Auto

March 2008

Allstate sought a rate change of 0.0%. After an evidentiary hearing, the Commissioner ordered a 15.9% rate decrease, saving consumers $250 million in auto insurance premiums annually.