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CA Department of Insurance

Judge denies State Farm’s attempt to stop regulator’s order to reduce rates

News: 2016 Press Release

For Release: December 8, 2016
Media Calls Only: 916-492-3566
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Judge denies State Farm’s attempt to stop regulator’s order to reduce rates
SAN DIEGO, Calif. — Superior Court Judge Katherine Bacal today denied State Farm's emergency request to stay a November order issued by Insurance Commissioner Dave Jones that directed State Farm to reduce homeowner and renter rates by seven percent and issue refunds totaling more than $100 million to State Farm's policyholders. While the court set a hearing for December 16 on State Farm's motion for a stay, the rejection of the emergency order means the Commissioner's rate-order will go into effect on December 13th as scheduled.

"State Farm's lawsuit challenging my order is an attempt to weaken consumer protections provided by Proposition 103, and deprive consumers of a $100 million rebate and ongoing relief from excessive insurance rates," said Insurance Commissioner Dave Jones. 

Commissioner Jones ordered the rate reduction, which is effective on December 13, 2016, after considering voluminous evidence and actuarial analyses that was presented during a lengthy hearing process, which revealed State Farm's rates were excessive and unjustified.

State Farm requested a rate increase of 6.9 percent. Based on the evidence presented during a rate filing public hearing, however, the commissioner determined that rates State Farm is currently charging are excessive. Specifically, Commissioner Jones ordered State Farm to reduce its homeowner insurance rate by an average of 5.37 percent, its renter insurance rate by an average of 20.39 percent, and its condominium insurance rate by an average of 13.81 percent -- for a weighted average of 7.0 percent.

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Media Note: The next hearing is scheduled in San Diego Superior Court on Friday, December 16 at 1:30 p.m.

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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