The insurer says it is negotiating with the state Insurance Department over underwriting standards and a rate increase.
The Los Angeles Times
Two months after saying it would stop selling new policies in California, Safeco said it would resume the sale of homeowners insurance policies to new customers in the state. The insurer, however, is seeking a rate increase for homeowner policies.
Mike LaRocco, chief operating officer of Safeco Personal Insurance, said he thought that a full agreement with the state Insurance Department on acceptable underwriting standards would be announced shortly. Safeco holds 240,000 homeowner policies in California.
The company said it expected to see “some very, very modest growth” in the number of its policyholders.
State Insurance Commissioner John Garamendi, meanwhile, said that Safeco had reduced its request for a homeowners rate increase from 19.7% to 7%; he said that the increase could be approved by mid-October.
In July, Safeco announced it was terminating sales to new customers in California because of a dispute with Garamendi.
Two days later, the insurer said it would resume sales if the state approved the 19.7% increase.
A consumers group, the Foundation for Taxpayer and Consumer Rights, said that it would appeal such an increase, throwing the matter into possibly months of administrative hearings.
Safeco originally said that it was alarmed at efforts by Garamendi to adopt regulations restricting the insurance industry’s rights to use past claims history and computerized databases in selling insurance.
However, LaRocco said Safeco had not formally joined in a lawsuit against the regulations, and was trying to reach an agreement with the Insurance Department on the matter.
LaRocco added: “We continue to believe the best way to resolve these issues is through working carefully with the department.”