Appeals Filed With TDI on Mandated Rate Cuts

August 20, 2003

Eleven of the largest carriers writing homeowners policies in Texas filed appeals with the Texas Department of Insurance and requested hearings on state-ordered rate cuts. According to the Fort Worth Star Telegram, the eleven companies provide around three-fourths of the residential coverage in the state.

Insurance Commissioner Jose Montemayor recently ordered most of the state’s top 32 homeowners insurers to lower their rates. The rate cuts, a result of the insurance regulation reforms implemented in Senate Bill 14, ranged between 1.5 percent and 31 percent. The 32 carriers had until Aug. 18 to file their appeals and Montemayor has 30 days from that date to rule on them.

State Farm, the state’s biggest insurer, is faced with a 12 percent rate cut. Allstate, the second-largest, was ordered to lower rates by 18.2 percent. Farmers, the state’s third-largest insurer, has a mandate to cut rates by17.5 percent.

Other companies protesting the required cuts include National, Consolidated, Trinity, Kemper, Metropolitan, Nationwide and Continental. Columbia has challenged an ordered rollback on separate property insurance typically sold to the owners of rental property.

According to the Austin American-Statesman, USAA, the fourth largest home insurer has no plans to appeal. The company said although it disagrees with the commissioner’s order, it sees the appeals process as too burdensome on its members.

TDI has already scheduled hearings Sept. 2 – 10 for some of the companies filing appeals. For more information on the hearings schedules visit the TDI Web site at

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