Consumer Watchdog has filed a petition challenging the insurance rates that two companies in the
Travelers' rate proposal would affect nearly 16,000 businesses in the companies'
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Under Proposition 103, insurance companies are barred from charging excessive auto, home and business rates. The voter-approved measure also authorizes consumers to challenge illegal rates and other insurance practices. This system has saved
In this case, Travelers requested an overall rate decrease of -4.4%. However, Travelers' own data show that an overall rate decrease of at least -20% is warranted. Consumer Watchdog's petition alleges that Travelers' rate decrease proposal does not go far enough and would result in excessive rates.
Among other things, Consumer Watchdog's actuarial analysis found evidence that Travelers over-projected insurance losses and under-projected premium growth. Additionally, Travelers' ratio of the amount of claims it paid to policyholders compared to premiums earned - an industry indicator of underwriting profitability - showed the company should be making much deeper rate cuts: In 2016, for example, Travelers paid out
Travelers may respond to Consumer Watchdog's petition within 5 days. If the insurance company refuses to lower its rates to reasonable levels, the Insurance Commissioner is required by law to hold a hearing on Consumer Watchdog's challenge.
For a copy of Consumer Watchdog's request for a hearing, click here: http://www.consumerwatchdog.org/sites/default/files/resources/2017-06-19_cwd_petition_for_hearing_petition_to_intervene_and_notice_of_intent_to_seek_compensation.pdf
To read more about Proposition 103, click here: http://www.consumerwatchdog.org/focusarea/prop-103-california-insurance-reform