Facebook Twitter

INSURANCE COMMISSIONER PUTS FREEZE ON CALIFORNIA AUTO RATES

SHARE INSURANCE COMMISSIONER PUTS FREEZE ON CALIFORNIA AUTO RATES

California's insurance commissioner put an immediate six-month freeze on auto insurance rates and said she would set the size of voter-mandated rate rollbacks by the end of the year.

Commissioner Roxani Gillespie said Monday she ordered the freeze partly in response to an announcement last week by Farmers Insurance Group that it would raise auto rates 5.9 percent Nov. 1. That would be one week before Proposition 103 gives the state Department of Insurance authority to veto rate increases.Some other insurance companies indicated they had similar plans, she said.

"The rate freeze I am imposing will protect consumers and clamp a lid on any insurance company attempting to raise rates," she said.

Gillespie also said she would set industrywide standards for the rate rollback required by the proposition, and for future rate approvals by her department, at hearings scheduled to start Oct. 30. She said the standards would apply to every insurance company in the state.

A court challenge to the freeze is "a good possibility," said David Fountain, spokesman for Farmers and State Farm, which have formed the Personal Insurance Federation of California.