California insurance commissioner meets privately with State Farm, hopes to make rate hike decision within two weeks

By Levi Sumagaysay, CalMatters

California’s largest insurer should know within a couple of weeks whether it can raise premiums on its nearly 3 million policies in the state after making its case in a face-to-face meeting with Insurance Commissioner Ricardo Lara today.

In comments after the closed-door meeting, Lara said he would carefully consider the request, which he previously rejected. He said he hoped to reach a decision within two weeks.

State Farm General — the state arm of the national State Farm Group — had asked to increase homeowner premiums an average 22% on an interim basis outside the usual approval process under California insurance law. It wants to bypass the rate hearing that would normally be required, saying it has been waiting for the Insurance Department to approve rate increases it requested last year, and that payouts from the Los Angeles County fires have worsened its financial position.

In the request, made at the beginning of February, the company said it wants to start charging customers the “emergency” rate increases in May. Lara rejected the request against his staff’s recommendation Feb. 14, saying he needed more information and called for the company’s top executives to appear before him.

Today’s meeting, in the Oakland offices of Lara’s Insurance Department, lasted for nearly an hour and a half. At the meeting were representatives of the department, State Farm, including Chief Executive Dan Krause, and Consumer Watchdog, an advocacy group that urged the commissioner to reject the interim rate increases. 

In a press conference after the closed-door meeting, the commissioner said he is going to look at the company’s data, ask for more information if he needs it and wants to “get this done” no less than two weeks from now.

“I want consumers to understand why I made the decision,” he said.