A request by State Farm to block an order requiring it to issue more than $100 million in premium refunds will be considered next week in San Diego County Superior Court.
California Insurance Commissioner Dave Jones, citing authority of the state's landmark Proposition 103, ordered the Bloomington, Ill., insurer in November to issue the refunds and lower its homeowner and rental insurance rates.
State Farm maintains that Jones does not have the legal authority to issue the refunds and disputes how the rate reductions were calculated. The commissioner's order is scheduled to take effect Tuesday.
Judge Katherine Bacal on Thursday scheduled a Dec. 16 hearing to consider a request by State Farm to stay the order while a lawsuit it has filed challenging the commissioner is heard in court.
The legal case stems from a move last year by advocacy groups Consumer Watchdog and the Consumer Federation of California to challenge a proposed rate increase by State Farm.
State Farm had said its proposed 6.9% increase for homeowners and rental insurance was needed to cover the additional risk of wildfires. After the advocacy groups' challenge, an administrative law judge agreed this year that State Farm's data showed no rise in wildfire losses.
In November, Jones signed off on the judge's recommendation that the requested increase was not valid, that its previously approved rate wasn't justified and that customers should be refunded money for being overcharged on premiums.
Jones has ordered State Farm to reduce its homeowners insurance rate by an average of 5.4%, its renters insurance rate by an average of 20.4% and its condominium insurance rate by an average of 13.8%.