The California Department of Insurance announced that a force-placed insurer will reduce its rates by 30.5 percent, as a part of an agreement with the Department. The insurer’s rate reduction resulted from the Department of Insurance’s examination of California’s largest force-placed insurers’ annual financial statements. The examination found low loss ratios, which are indicative of excessive rates. The Department of Insurance announced that the agreement will result in a $577 annual cost reduction to homeowners, with total estimated savings of $42.7 million. The Department of Insurance also noted that it is contemplating regulations that would require insurers that write force-placed insurance to file the rates as a commodity line, which would restrict an insurer’s ability to deviate from the standard prior approval template.
Alert November 13, 2012